I PMed you the answer so we don't Hijack the thread. Lemme know if you have more questions.

I am also interested in the answer. I am taking my car in for service on friday and wanted to see if I should update the DCT software.

Here was my answer:
I bought my car in May 2010. I think it was March 2010 production HOWEVER, I don't think it had the most up-to-date software at that time. 4 months later I went for an oil change and they said there is software bulletin for all M3s but couldn't do it at that time cause it takes few hours. Got it done 2 months ago. After the update:

1) The phone screen while on active phone call was different (allowing me conference calls and using the dial pad while on the phone) when I posted that, they said it was supposed to be like that since purchase, that is not a new feature, that's why I think I didn't have the up-to-date software on purchase.

2) The other change is very noticeable improvement in cold starts. The car does not jump like a rabbit on 1st and 2nd when I drive it first thing in am

3) And finally the throttle blips on S3..It used to happen only on extreme braking but now a simple downshift from 4th to 3rd would give a blip..They are not as predictable as on S4-6 but they with no doubt happen much more frequently after the update.

Here was my answer:
I bought my car in May 2010. I think it was March 2010 production HOWEVER, I don't think it had the most up-to-date software at that time. 4 months later I went for an oil change and they said there is software bulletin for all M3s but couldn't do it at that time cause it takes few hours. Got it done 2 months ago. After the update:

1) The phone screen while on active phone call was different (allowing me conference calls and using the dial pad while on the phone) when I posted that, they said it was supposed to be like that since purchase, that is not a new feature, that's why I think I didn't have the up-to-date software on purchase.

2) The other change is very noticeable improvement in cold starts. The car does not jump like a rabbit on 1st and 2nd when I drive it first thing in am

3) And finally the throttle blips on S3..It used to happen only on extreme braking but now a simple downshift from 4th to 3rd would give a blip..They are not as predictable as on S4-6 but they with no doubt happen much more frequently after the update.

Also what I noticed was if you put the car in s5 (for me I press m when I getin) it stays there even if I shift to D and back. Befor it always went back to S 3 when downshifting from D. It was very annoying.

Also what I noticed was if you put the car in s5 (for me I press m when I getin) it stays there even if I shift to D and back. Befor it always went back to S 3 when downshifting from D. It was very annoying.

Ok so you hit M, that gets you on S5 then at some point you switch to D. Then while on D if you downshift it goes back to S5..
while on D try to shift back to S with the shift knob, I think it goes back to S3..I'm saying that cause same happens with me and it goes to S3 which makes me so angrey.

A lot of people outside the sport car community don't know what rev matching is when downshifting so it confuses them... and apparently startles some!

The only negative is that to untrained ears and minds (most people), downshift blips just make you look like a douchey showoff. I was rounding a sharp right hander from Wilshire onto santa monica blvd and downshifted all the way to 1 on my dct and it blipped up to abuot 4.5k rpm and some doofy guy with his girl standing on the corner yelled "AWESOME!" in the most sarcastic tone you could imagine. It made me think how he and others probably think that all we are doing is revving to show off.

The only negative is that to untrained ears and minds (most people), downshift blips just make you look like a douchey showoff. I was rounding a sharp right hander from Wilshire onto santa monica blvd and downshifted all the way to 1 on my dct and it blipped up to abuot 4.5k rpm and some doofy guy with his girl standing on the corner yelled "AWESOME!" in the most sarcastic tone you could imagine. It made me think how he and others probably think that all we are doing is revving to show off.

believe me, that is one reason why I sometimes DO NOT switch to S5 from the default S3!! I know it's sad but true. I just don't want to be getting into my work parking lot or around and coworkers think I'm showing off.

The only negative is that to untrained ears and minds (most people), downshift blips just make you look like a douchey showoff. I was rounding a sharp right hander from Wilshire onto santa monica blvd and downshifted all the way to 1 on my dct and it blipped up to abuot 4.5k rpm and some doofy guy with his girl standing on the corner yelled "AWESOME!" in the most sarcastic tone you could imagine. It made me think how he and others probably think that all we are doing is revving to show off.

A friend of mine was in my car the other day and told me "Revving the engine doesn't make your penis any bigger". I had to explain to him what rev matching was and how the computer was doing that, he didn't buy it. Enthusiasts expect rev-matching, everyone else thinks you are a douchebag, especially with an exhaust that "pos" on downshifts. What's the song, "Hail to the douchebags" or something like that?

The only negative is that to untrained ears and minds (most people), downshift blips just make you look like a douchey showoff. I was rounding a sharp right hander from Wilshire onto santa monica blvd and downshifted all the way to 1 on my dct and it blipped up to abuot 4.5k rpm and some doofy guy with his girl standing on the corner yelled "AWESOME!" in the most sarcastic tone you could imagine. It made me think how he and others probably think that all we are doing is revving to show off.

I couldn't care less what drivers & pedestrians around my car think. What am I breaking, some social stigma? Love hearing them blips, including downshifting into 1st on slow corners.

Thought I'd share an experience that occurred to me last weekend. I was overtaking a car that was completing a reverse/parallel park against a curb so as I veered around it, I downshifted into 2nd gear, whilst firm on the brakes to stop at a set of red lights. As I downshifted (Drivelogic set on S4; blipping as you know occurs in S4, S5, S6), the exhaust made a great belting blip and (unintentionally) scared the crappers out of a guy getting out of his car. All I could see in my rear view mirror was his reaction followed by his animated wan_er gestures. I guess I could only find this amusing... not sure if that's the juvenile in me. These downshifts sound great from within the car, even better when you go through a tunnel with the window down. I do seem to notice the blips attract a lot of attention (not that I want it); I guess bystanders may never appreciate the fun factor driving a DCT from the driver's seat. The novelty is definitely not wearing off...